The state of the newspaper industry: Has the Deseret News found the right formula?

Originally published at utahpolicy.com. Republished here with permission.

Way back in 1861, Wilbur F. Storey, the owner and editor of the Chicago Times, articulated what became the de facto mission of aggressive daily newspapers for some 150 years. “It is a newspaper’s duty,” he said, “to print the news and raise hell.”

Well, that’s not exactly the mission of the Deseret News these days. The paper has replaced Storey’s memorable exhortation with six core areas of editorial focus: the family, excellence in education, faith in the community, financial responsibility, care for the poor and values in the media.

That doesn’t sound like nearly as much fun as printing the news and raising hell. But, for the Deseret News, at least, it might just be the better journalistic and business model for surviving the communications upheaval that is ravaging the newspaper industry, wreaking havoc on those once-influential, proud and feared pillars of society.

As a former journalist and current political consultant, I have always advised clients not to get into fights with the folks who “buy ink by the barrel and paper by the roll — and always have the last word.” But today, ink and paper are not necessary to communicate with any audience in the world. Everyone can be a publisher. And anyone with enough patience to keep posting responses — however irrelevant and offensive — can have the last word.

Thus, newspapers are struggling. Newspapers don’t just compete with each other or with TV and radio. They compete with Facebook, Google, Yahoo, CraigsList and even Apple and Amazon. Many of the papers that have followed Storey’s advice are in big trouble, trying to find a financial model that works in our media-saturated world.

The New York Times took a look at its own industry recently and didn’t raise hell but found a lot of newspapers going through hell. Reporter David Carr wrote that the newspaper industry is “by all appearances starting to come apart.” The “financial stress is more visible by the week,” caused by declining advertising revenue and unfunded pensions. Some papers are declaring bankruptcy; some papers are reducing print publication to three days a week.

And how does the industry engage a younger generation that is the most media-savvy and information-obsessed in history — but isn’t reading newspapers?

Interestingly, the Deseret News seems to be poking its masthead out of the wreckage and is being viewed around the U.S. newspaper industry as a publication that just might have some answers, might be developing a model — even a print model — that works in the digital age. Several dozen editors and publishers from around the country who want to take a look at the Deseret News model, along with other successful initiatives, came to Utah in September and were hosted by the Deseret News.

As a former longtime employee of the Deseret News (political editor, city editor, managing editor and current co-author of a Sunday political column), I have been fascinated to watch the evolution of my old paper (I left 12 years ago), especially since the arrival of a number of new executives, mostly from outside the newspaper industry, who have been running the paper for the last few years.

I haven’t always liked what I’ve seen, especially with regard to hard news coverage of government and politics. But I’m also a realist who has watched as digital technology has forced a number of industries (music, book publishing, photography, retailing, telecommunications, etc.) to endure the process of creative destruction — either change dramatically or die. It’s likely that old practitioners like me, steeped in journalistic tradition, could not lead the transformation that is required to make money, while producing good journalism, in the Digital Age. Lots of old-time journalists are failing.

The Salt Lake Tribune, for many decades, has been the big kid on the Utah newspaper block. While circulation fluctuated over the years, the Tribune usually enjoyed double the Deseret News daily and Sunday readership. I remember when a former Tribune publisher and Newspaper Agency Corporation president predicted that one day only one newspaper would survive in Salt Lake City — and it wouldn’t be the Deseret News.

Today, it is the Deseret News that is growing more robustly and that appears poised for significant breakthroughs in both revenue and readership.

Interestingly, some of the old disadvantages associated with the Deseret News have now become advantages. For example, when I worked for the Deseret News, LDS Church ownership was considered a mixed blessing, with more negatives than positives. Today, with the ability to reach audiences throughout the world via the Internet, church ownership provides a growing worldwide market (some 14 million LDS members) for the Deseret News. The Deseretnews.com website receives more readership outside of Utah than inside.

While the Tribune’s market is Utah’s metropolitan area and, to a lesser extent, rural Utah, the Deseret News can craft information products and services not just for Utah, but for church members and like-minded people across the country and the world. That’s a big market that the Deseret News and sister companies are clearly targeting. The newspaper has ambitions to become much more than just a Utah publication.

What’s more, in the age of digital convergence, the family of communications businesses owned by the LDS Church complement each other nicely and can be leveraged so the whole is greater than the sum of the parts. While that process of convergence is very difficult, and all the possible synergies and benefits have yet to be realized, it’s clear that KSL Radio, KSL TV, the Deseret News, Deseret Book and Deseret Digital Media, with their respective on-line operations, can become a powerhouse media empire capable of dominating Utah and reaching out to worldwide church membership and other targeted markets.

Certainly, the type of journalism being practiced at the Deseret News is different today, and it grates mightily on traditional journalists. Top management positions are held mostly by people who didn’t grow up in the newspaper industry.

So can non-journalists successfully run a daily newspaper? I sat down for an hour with Clark Gilbert, president and CEO of the Deseret News Publishing Co. and Deseret Digital Media, to discuss the paper’s business model and editorial voice.

Gilbert was quick to mention that he doesn’t want anyone to think that the Deseret News has the new and challenging world of journalism figured out, especially in such a rapidly-changing media environment. “The industry is really nervous; we’re seeing lots of alarm,” Gilbert said. “Every newsroom in America is under pressure.”

He said the Deseret News is making progress but has a long way to go, and other media organizations are also doing innovative things. He mentioned the Boston Globe, the Atlantic magazine and McClatchy newspapers as making breakthroughs in navigating the digital world. “They are figuring out what their niches are and focusing on their strengths, both in print and online.”

But the Deseret News is also attracting a lot of attention. Gilbert said Deseret News executives are receiving numerous invitations to make presentations and frequently host visits from other newspapers, “including some big names in newspapers and magazines.” Publisher Chris Lee spent two days in New York at the Harvard Media Club, discussing Deseret News innovations with a number of large publications, including the New York Times, The Financial Times, The Economist and also broadcast outlets like NBC and CNN.

“We were receiving so many invitations to go out and speak that we didn’t have enough time, so we suggested a two-day workshop in Salt Lake City,” Gilbert said of the September seminar. “People want to know how we have transformed the print business, what content and business model innovations we’re making.” Some 35 editors and audience managers from papers large and small attended. Editors from papers like the Las Vegas Review Journal and the Southbend Tribune mingled with digital directors of the San Francisco Chronicle and the Dallas Morning News.

Gilbert said many publications simply want to put on the Internet what they’ve traditionally published in print editions. That’s not nearly enough for success in the new communications world. Transformations of both digital and print must occur simultaneously, he said, and that’s difficult for traditional newspaper people to pull off. “Both transformations require real innovation, fresh thinking and doing things differently,” he said. “You can’t just tinker at the edges.”

On the digital side, Gilbert has separated online operations from the TV, radio and print businesses so that digital media innovation can flourish with new digital products and services unencumbered by traditional news media thinking. There’s a reason digital powerhouses like Google, Amazon and Facebook didn’t come out of the media world, even though they’re essentially in the information and advertising business, just like newspapers. Journalists think like journalists, not like digital media innovators.

Thus, for the digital side of the business, Gilbert has hired staff from some of the top digital companies in the country, not from journalistic ranks. While focusing on news and information, the digital side is creating products and services for a worldwide audience. KSL.com and Deseretnews.com, combined, are now web powerhouses. “We don’t compete against the Tribune,” Gilbert said. “We compete for advertising against Google, Yahoo, Facebook and so forth. Those are the guys that keep us humble, keep us up at night.”

Deseret Digital Media has created a Web Content Dashboard for digital innovation that tracks and measures key metrics in 16 different categories in areas such as audience engagement, audience growth, new sources of content, multimedia and mobile. The dashboard shows managers in real time how affiliated websites are performing and what content, design, apps, video, search and social strategies are most popular and effective among users. The dashboard has been adopted by The American Press Institute and the Poynter Institute as a tool they will use in online courses for newspaper digital content managers.

Digital business now accounts for 50 percent of new revenue growth at the Deseret News. Overall, digital brings in well over one-quarter of the company’s revenue (with the rest coming from newspaper, TV, radio) and is expected to rise to one-half of revenue before long, Gilbert said, and will eventually subsidize the print business.

But print isn’t dead, Gilbert predicts, as long as publishers are willing to truly transform the print product determining more precisely their missions, their market niches and where they can excel. In a day when high-quality specialty publications all over the world are readily accessible at the click of a mouse, it makes no sense for newspapers to try to be all things to all people. “The old way of thinking is to cover everything,” he said. “That doesn’t work today. It’s too expensive.”

Why should the Washington Post cover fashion, for example, when numerous fashion publications and blogs cover fashion in far more depth and detail, Gilbert asked. “Covering everything creates a very expensive cost structure. You push that high cost structure on covering things you’re really not very good at.” He said he heard an industry leader say that newspapers have been variety shows. “We can’t afford that anymore. The web provides access to detailed, expert information in every area. We have to decide what we can contribute that no one else can do — that our audience is interested in. And then we have to determine how we will innovate around that very relevant product that we produce.”

So what is the Deseret News market niche? After much research and consideration, the paper decided on the six areas of editorial focus: the family, excellence in education, faith in the community, financial responsibility, care for the poor and values in the media.

“We can be the best in the world at in-depth, family-focused news and information -- topics we know from research that our audience is highly interested in. We have a top-quality enterprise team that produces excellent in-depth stories on these topics. We are winning national awards covering topics relevant to our audience.”

So the Deseret News may not cover every city council meeting or legislative hearing, but it will cover the big issues, the big themes, the trends that emerge in politics and government, through the lens of one of its six areas of emphasis. “How does public policy affect families?” Gilbert asked. “You’ll see great reporting here, better than anywhere in the country. We will lead on stories that really matter to Utah families.”

And, Gilbert said, this strategy travels well, providing opportunities for the Deseret News to become a national newspaper. “We have compelling research data in Utah and nationally that a big market exists for stories and information that relate to our six areas of focus. These aren’t just LDS Church members. Good people all over the country share these values. Some 56 percent of all Americans feel the same way Utah families do about values and culture. This is what they want. It spikes off the chart. The LDS market is large, but a much bigger market exists for our reporting. No one else is doing this kind of reporting. That’s our brand position. Over half of Americans and two-thirds of Utahns is not just a niche. It’s the dominant market and it’s almost entirely under-served. That’s where we differentiate our reporting. People want what we’re producing.”

Thus, Gilbert has created a weekly national edition of the Deseret News. It’s being mailed out around the country and is inserted in newspapers in St. George, Logan, and papers in Idaho, with more coming. LDS Institutes on college campuses around the country are distributing it. In the face of print circulation declines at nearly all newspapers, the national edition has allowed the Deseret News to buck the trend for Sunday circulation. With its national edition, the Deseret News has a combined Sunday newspaper circulation of 176,000 in November, much higher than the Tribune’s 135,000, according to the Audit Bureau of Circulation. (The ABC numbers include print, print replica [PDF] and app subscriptions but not website readership.) Deseret News weekday circulation also grew substantially, while Tribune daily circulation fell slightly. “Our goal is to be one of the top 25 papers in the country in circulation,” said Gilbert, “and we’ll get there. We are strengthening our voice. We’re in markets we haven’t been in before.”

The newspaper has also created a syndication service, selling in-depth, family-oriented content to other print and online publications. “Were extending our reach,” said Gilbert. The paper is publishing a number of stories, focused on the six areas of emphasis, that don’t even use local sources. A recent story, for example, on “co-parenting” in families where the parents are divorced, used a variety of academic and government sources outside of Utah.

Quality local news coverage is clearly a sensitive topic for Gilbert and other Deseret News executives. The paper went through a difficult period with major layoffs, the use of citizen contributors and reduced hard news coverage of government and politics. Quality suffered. Staff morale plummeted. The Richard Burwash incident was emblematic of the problems, when the mayor of West Valley City submitted articles under a fake name.

Gilbert feels local news coverage is now stabilizing and improving. He hired Douglas Wilkes, whom he described as an “excellent, hard-nosed journalist” (from the Press Democrat in Santa Rosa, Calif.) as managing editor of the integrated newsroom. “Doug demands rigor, integrity and he pushes us to go deeper,” Gilbert said. “We’re now doing some excellent enterprise journalism on local topics reflected in our six areas of focus, which is what our audience cares about.”

So Gilbert wants to effectively cover topical in-depth news and important Utah issues, but typical newspaper coverage won’t necessarily be the emphasis. “We don’t have unlimited resources, so we may not do as much traditional coverage as our competition does on Capitol Hill. But we know what our audience wants, not just what newsroom wants. We’re having an impact with in-depth stories on what really matters to our readers. We won’t cover every city council meeting, but we will focus on the issues that matter to Utah families and will go deep on these issues. Look at the stories where the Deseret News leads the dialogue in our Utah communities. Examples include immigration and our recent five-part series on the Census; Utah caucuses and voter participation; education reform in Utah’s K-12 and higher education; community standards on such issues as air quality, alcohol consumption and fiscal prudence in our state and local budgets. These are the issues that matter to Utah families and these are the issues where we are investing and shaping the conversation in this state.”

Stories related to the six areas of focus aren’t just fluffy pieces, he said. “We’re doing deeper analysis. Utah families want stories that are relevant to family and faith, but not puff features. Our journalists will provide insights and answers. We need great reporting, real rigor and deep analysis.” He believes good progress is being made.

“We believe good journalism is really, really important,” Gilbert said. “But it has to be paid for, and we can’t do everything. We have to innovate the legacy journalism models. Southwest Airlines was the low cost leader, but it invested more on customer service, where the real value was, than other airlines. We have to decide where the real value is. That’s where we’re making our investment.”

The paper isn’t yet where it needs to be, Gilbert said. “We make plenty of mistakes, and we still have a long way to go. If you ever decide you’ve figured it out, you’re in trouble. We have an owner who understands this is a long-term process. We have to keep recreating and keep innovating. The industry is far from having all the answers.”

My own sense, and I believe it is reflected among Utah community leaders, is that the Deseret News is now producing some good journalism and has probably developed a business model that can survive and perhaps even thrive in the challenging media market. The church, family and values-oriented coverage is nicely done and improving, for those who are interested (certainly, a majority of Utahns).

But the Tribune is still ahead of the Deseret News in breaking news, local coverage, business coverage and particularly political and government coverage. Tribune editors and reporters are better at anticipating important local stories and providing more in-depth coverage. The Tribune is more effectively playing the traditional watchdog role of a fiercely independent daily newspaper.

When I made that point to Gilbert, he said: “I won’t directly disagree. But I would respond that we feel we are playing the watchdog role for faith and families where traditional media organizations have failed or walked away. Religious liberty is under attack in America despite its protections in the Constitution. The American family is in decline with 1-in-3 children growing up without a father in the home. Where is the watchdog role that the industry speaks so much about? We believe that it is actually the Deseret News that is fiercely independent — independent of other media who have largely failed to play the role for families and faith institutions that they have so often played for others who are maligned or misrepresented.”

While seasoned journalists and hard news junkies may not like the direction of the Deseret News, Gilbert clearly isn’t worried about them. His target is families and individuals who share the values of the six areas of focus, not journalists.

When I was in the newspaper business years ago, the conventional wisdom was that the Tribune would always dominate. Utahns who are not of the Mormon faith, and many less-active Mormons would want to read the non-church owned paper. They make up more than half the population. But today, with overall newspaper readership in decline and traditional models under siege, the old expectations may not play out. The Tribune is pursuing a more traditional newspaper business model, but it doesn’t have all the synergies and advantages that the Deseret News has with its big web presence, sister companies and potential worldwide audience. The circulation trends appear to be in favor of the Deseret News.

It will be fascinating to watch over the next few years what happens with Utah’s two largest newspapers. They are clearly going in different directions, pursuing different business and journalism models.